‘A Sigh of Relief’: Investor Details Why Netflix is Soaring This Month

It’s not you, it’s me, **Netflix (NASDAQ:NFLX) **said to Warner Bros. Discovery upon electing to back away from the potential megadeal that would have combined the two massive content creators.

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While Netflix had sought to unite these “two pioneering entertainment businesses” according to its initial press release trumpeting the deal, the price tag simply became too much to bear.

In sharing their decision not to match Paramount Skydance’s terms, Netflix management acknowledged that the deal was never a “must have at any price.”

Clearly, the market viewed this move with a profound sigh of relief. The company’s share price has surged by roughly 30% over the past five days of trading.

So, where does NFLX go from here? Investor Jack Delaney isn’t surprised that NFLX is soaring this month.

“With the uncertainty now removed, the stock price rallied, and that rally could continue in March,” explains the investor.

That’s not to say that Delaney didn’t appreciate the deal’s allure. After all, having Warner Bros.’s assets would have given Netflix significant opportunities to monetize beloved franchises such as Harry Potter, Game of Thrones, and the DC comic book universe. New television shows and movies could have even been in the offing, suggests Delaney.

However, the price wasn’t insignificant, he acknowledges. Moreover, Delaney adds that the potential deal “didn’t seem crucial for Netflix’s long-term success,” further clouding the rationale for the massive expenditure.

Beyond the immediate relief, the investor points out that Netflix is now priced for steady growth. Especially for those with long-term horizons, Delaney notes that Netflix has plenty of opportunities for expansion.

These run the gamut from new forays into video podcasting and live sports. The growth of advertising revenue and expansion into international markets offer additional windows to expand sales.

“From here on out, the story will no longer be about whether it can make a pricey Warner Bros. deal pay off, but about how well Netflix can execute with its core business and its newer endeavors to create value for shareholders,” concludes Delaney. (To watch Jack Delaney’s track record, click here)

Wall Street is fairly upbeat about NFLX. With 30 Buys, 9 Holds, and 1 Sell, NFLX enjoys a Moderate Buy consensus rating. Its 12-month average price target of $114.26 points to an upside of about 16%. (See NFLX stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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